Chapter 6 LearnSmart (+more)

What are the five trends that have significantly influenced the landscape of global marketing?

(1) Gradual decline of economic protectionism by individual countries (2) Formal economic integration and free trade among nations (3) Global competition among global companies for global customers (4) Emergence of a networked global marketspace (5) Growing prevalence of economic espionage

____% of all countries do not have convertible currencies or government-owned enterprises lack sufficient cash or credit for imports

70%

Nescafe is marketed using different coffee blends and promotional campaigns to match consumer preferences in different countries. This is an example of...

A dual adaptation strategy

Which two acts make it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain business in a foreign country

Foreign Corrupt Practices Act (1977) and International Anti-Dumping and Fair Competition Act (1998)

A(n) ________________ is a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs.

Global brand

_______________ is a marketing strategy that employs the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ. Used by transnational marketers.

Global marketing strategy

A ______________________ is a situation where products are sold through unauthorized channels of distribution, often because of discrepancies in pricing b/t countries.

Gray market (or parallel importing)

What are the main components of the political and regulatory climate assessment that a global company must address?

How stable the country is in terms of government, how difficult it is to navigate the trade regulations in order to do business there

______________ exporting is when a firm sells its domestically produced products in a foreign country through an intermediary. It has the least amount of commitment and risk but will probably return the least profit

Indirect

In China, where outside of major cities there are many unnavigable roads, foreign companies have to adapt their distribution strategies. Thus, before entering such a market, a firm must investigate the economic...

Infrastructure

What are arguments for Protectionism?

It limits the outsourcing of jobs, protects a nation's political security, discourages economic dependency on other countries, and promotes development of domestic industries

A(n) _____________________ is a global market-entry strategy that creates a partnership between a local and a foreign firm that will share ownership, control, and profits for the new company

Joint venture

What accounts for 80 percent of world trade?

Manufactured goods and commodities

Pricing in the global marketplace is a difficult task because of what two factors?

Many countries have rules governing the competitive marketplace and issues like tariffs and anti-dumping laws might exist

A _______________ is a restriction placed on the amount of a product allowed to enter or leave a country.

Quota

What are the functions of the WTO?

Reviewing and issuing decisions regarding trade disputes and setting rules governing trade between its members

________________ examines the correspondence between symbols and their role in the assignment of meaning for people.

Semiotics

____________________ industries such as telecommunications, transportation, insurance, education, banking, and tourism account for 20% of world trade.

Service

A government may use protectionism measures that include...

Setting quotas and imposing tariffs

An example of a ____________________ is Germans' lack of interest in using credit cards like Visa and MasterCard, perhaps in part because the German word for 'debt' is the same as the word 'guilt'.

Societal value

What is it called when a government places a tax on products or services entering a country. They primarily serve to raise the price on imports.

Tariff

What are two examples of trade agreements signed by several countries to lift many trade barriers between them?

The EU and NAFTA

Considering share of trade rather than volumes, which of the following best describes changes in importing and exporting in the United States over the past 30 years?

The U.S. share of world exports has decreased while its share of imports has increased

Who is the world leader in GDP?

The United F*cking States, that's who

This trend affects world trade by facilitating the exchange of not only goods and services but also information.

The increased reach of the internet

What are two risks associated with licensing as a global market-entry strategy?

The name or reputation of the company may be harmed and the company has limited control over foreign operations

In an environmental scan, cultural, economic, and political-regulatory factors are most important for the firm operating globally because...

These factors can have the most striking differences from the domestic market

What effects do tariffs and quotas have on trade?

They limit expansion of foreign firms, protect local firms, and might even make it difficult to obtain certain products.

Firms spend millions of dollars to develop brand names that have no preexisting meaning in any known language because...

They want to avoid potential embarrassment that language confusion can cause

Marketers must adapt their global distribution strategies for developing countries because which two conditions are likely to exist?

Traditional channels that have been used do not exist and transportation and communication systems are underdeveloped

Who is the world's leading importer?

United States, followed by China and Germany

Cross-Cultural Analyses are important because they tell marketers...

What a society values, what customs are considered normal and expected, and what is represented by symbols

An example of a franchise is...

a McDonald's restaurant

The higher a country's purchasing power, the more likely it is to also have...

a large proportion of middle-income households

Regarding the U.S. balance of trade, the nation currently has...

a trade deficit

Because of cultural differences related to tanning and skin care, Golden Beauty sells the same products throughout Europe but must vary its advertising, using a ____________________ adaptation strategy.

communication

Global _______________ among firms exists when they originate, produce, and market their products worldwide

competition

Language can _______________ marketers' ability to communicate with customers in different countries.

complicate

Assessing the political and regulatory climate for marketing in a country or region of the world involves...

identifying the current climate and determining how long a favorable or unfavorable climate will last

Because of its broad reach, the ________________ is a promising tool for companies that wish to market globally, even though they must adapt their language or messages

internet

The trade feedback effect...

is an argument in support of free trade

A ________________ firm views the world as consisting of unique parts and markets to each part differently.

multinational (i.e. P&G changing its brand name for 'Mr Clean' all across the world)

A gray market is also known as...

parallel importing

Germany did not allow Walmart to sell some items below cost, an example of how a foreign government can constrain ___________________, which here made it impossible for Walmart to compete with local discount stores.

pricing strategy

A society's ____________ represent personally or socially preferable modes of conduct or states of existence that tend to persist over time

values

The biggest commitment a company can make when entering the global market is ____________________, which entails a domestic firm actually investing in and owning a foreign subsidiary or division. This market-entry strategy often follows one of the other three. Advantages include cost savings, a better understanding of local market conditions, and fewer local restrictions.

direct investment

The youth market exhibits similar needs and wants throughout the world, and is a good example of a(n) _______________ consumer

global

Technology allows people to connect from distant parts of the world, allowing the growth of _______________.

global markets

Even though in some countries per capita income is very low, marketers should realize that _______________________ might allow consumers to purchase their products.

government subsidies

Who is the world's leading exporter?

China, followed by the US and Germany

Which three environmental factors affect firms competing globally in strikingly different ways than they do firms operating domestically?

Cultural, Economic, and Political-regulatory

The _____________ of giving token business gifts is popular in many countries where they are expected and accepted.

Custom

_______________ are what is considered normal and expected about the way people do things in a specific country. They can vary significantly from country to country (i.e. In France, mean wear twice the # of cosmetics than women do).

Customs

What are the four common global entry strategies?

Exporting, licensing, joint venture, and direct investment

What are the disadvantages of a joint venture?

Arise when the two companies disagree about policies or courses of action for their joint venture or when governmental bureaucracy bogs down the effort

What two factors are potential negative aspects of tariffs when a foreign firm enters a new host market?

Artificially higher prices for consumers and lower demand for the import

____________ exporting is when a firm sells its domestically produced products in a foreign country without intermediaries

Direct

_________________ is a global market-entry strategy that entails a domestic firm actually investing in and owning a foreign subsidiary or division.

Direct Investment

_______________ is when a firm sells its product in a foreign country below its domestic price or below its actual cost.

Dumping

A country's communications, transportation, financial, and distribution systems together are known as its...

Economic Infrastructure

The clandestine collection of trade secrets or proprietary information about competitors is known as... (this practice is common in high-tech industries)

Economic espionage

The ________ is the common currency for 16 European Union member countries

Euro

______________ is producing products in one country and selling them in another country. Allows a company to make the least amount of changes to its product. It is commonly employed by large firms, but is the prominent global market-entry strategy for small- and medium-sized firms. Least amount of financial risk and allows a limited return to the firm.

Exporting

________________ is a marketing strategy in which a firm has as many different product variations, brand names, and advertising programs as they do countries in which they conduct business. Used by multinational firms.

Multidomestic marketing strategy

What are the advantages of a joint venture?

One company may not have the necessary financial, physical, or managerial resources to enter a foreign market alone and a government may require or strongly encourage a joint venture before it allows a foreign company to enter its market

Executives at a global cell phone company are nervous in light of a disputed presidential election that has resulted in riots in one of the countries in which they do business. They are concerned about the ______________________ of the country.

Political Stability

Many firms choose the direct investment strategy to enter foreign markets because...

Potential profits need to be shared with other firms and it offers the most control over operations

Changing a product to make it more appropriate for a country's climate or consumer preferences is known as...

Product adaptation

Selling virtually the same product in other countries is known as...

Product extension

Creating a totally new product to satisfy common needs across countries is known as...

Product invention

The EU has simplified the way multinational companies market their products in what ways?

Products and packaging can be more uniform for distribution across Europe and firms no longer have to worry about currency differences across borders.

______________________ is the practice of shielding one or more industries within a country's economy from foreign competition through the use of tariffs or quotas

Protectionism

Experienced global marketers use ___________________, where a translated word or phrase is retranslated into the original language by a different interpreter to catch errors. For example, IBM's first Japanese translation of its "Solution for a small planet" advertising message yielded "Answers that make people smaller."

back translation

The difference between the monetary value of a nation's exports and imports is called the ___________________.

balance of trade

Global _________________ are tailored to specific cultures and countries when necessary, but typically offer consistent product formations and advertising

brands

An estimated 10 to 15 percent of world trade involves ________________, the practice of using barter rather than money for making global sales

countertrade

When the Malaysian government exchanged 20,000 tons of rice for an equivalent amount of Philippine corn, the two countries engages in...

countertrade

A _________________________ is the price of one country's currency expressed in terms of another country's currency.

currency exchange rate

There is global competition in fields of pharmaceuticals and telecomms because these products _______________ national borders

flow across

_________________ is a variation of licensing and is one of the fastest-growing market-entry strategies today.

franchising

Global expansion often begins with exporting. Using a local intermediary to distribute the exported goods is known as...

indirect exporting

A(n) ________________ is a firm that engages in trade and marketing in different countries as an extension of the marketing strategy in its home country

international firm

Firms typically take a(n) ____________ approach when entering their first foreign markets

less risky

General Mills has a _______________ arrangement with French cooperative Sodima to produce and sell its Yoplait yogurt in the United States.

licensing

Under _______________, a company offers the right to a trademark, patent, trade secret, or other similarly valued item of intellectual property in return for a royalty or a fee. The company granting the license are at low risk and get a capital-free entry into a foreign market.

licensing

The party you work with under a __________________ for global sales could eventually become your competition.

licensing arrangement

A global environmental scan, marketing research, and judgements based on experience will determine the extent of _____________________________ that global marketing programs will have.

standardization or customization

When a country's exports exceed its imports, it incurs a _______________ in its balance of trade. When imports exceed exports, a ______________ results

surplus; deficit

Different cultures attach different meanings to things, and whatever now represents another idea or concept is known as cultural ____________

symbols

The primary difference between indirect and direct exporting is that the former involves ____________________ while the latter does not.

the use of intermediaries

Economic integration has been advanced by agreements like NAFTA that promote ________________ between member nations.

trade

Japanese regulations requiring cars to be assembled with Japanese parts is an example of a trade regulation that serves as a ________________ to US companies

trade barrier

A _______________ firm views the world as one market and emphasizes cultural similarities across countries or universal consumer needs and wants rather than differences.

transnational